Sent in by Veterans News and Information Services
By Jim Garamone WASHINGTON -- An across the board pay raise, a targeted pay
raise and a return to a retirement plan that pays 50
percent of base pay at 20 years are the three key elements
of a compensation plan for service members.
The compensation plan -- announced by Defense Secretary
William S. Cohen and Army Gen. Henry Shelton, chairman of
the Joint Chiefs of Staff, during a press conference at the
Pentagon Dec. 21 -- will be part of the President’s fiscal
2000 budget.
The across the board pay raise is pegged at 4.4 percent and
will take effect Jan. 1, 2000. Pay raises for the
“outyears” of the budget -- through 2005 -- are tentatively
set for 3.9 percent. “The increase is the largest in basic
military pay in nearly a generation,” Cohen said. “It
compensates our service members adequately and fairly.”
Civilian workers will receive the same increase.
The targeted pay raise is aimed at mid-level NCOs and mid-
level officers. Raises call for an additional .5 percent to
5.5 percent taking effect July 1, 2000. If approved, one
million service members will get a targeted raise, Pentagon
officials said. These are the most highly trained personnel
and the most attractive to private industry.
A senior defense official also called the targeted pay
raise “pay table reform.” He said the officer pay table is
the “most out of whack” with only 37 percent of raises over
a career coming from promotions and the rest through
longevity. “The preponderance [of new targeted raises] are
based on merit, performance, promotion versus just simply
being in the service for long periods of time,” said the
official.
Shelton said the revision in pay tables would reward the
“fast burners.” “If you take one of our great staff
sergeants [E-6] that has eight years of service, you’ll
find that one of his subordinates, who may be a sergeant,
an E-5 pay grade, who has 14 years of service, makes as
much or more than he does,” Shelton said.
Cohen said this would allow DoD to do a better job in
highlighting performance and rewarding service members for
their skills, education, experience and leadership
abilities.
The third part of the compensation package will change the
current retirement system. Cohen said during his travels
around the military, service members tell him the current
“redux” retirement system, which came into effect on Aug.
1, 1986, is perceived as unfair.
The previous retirement
system provided 50 percent of base pay if a service member
retired with 20 years in the military. Under redux, service
members retiring after 20 years receive 40 percent of their
base pay. Many mid-level service members who leave the
service cite redux as one of the primary reasons for not
staying. “We are committed to returning 20-year retirement
to 50 percent of base pay,” Cohen said.
A senior defense official said this package has been
endorsed by the White House and the Office of Management
and Budget. "The Defense budget I will submit to Congress
for next year will include a pay raise of 4.4 percent for
2000, a restructuring of pay to reward performance as well
as length of service, and an increase in retirement
benefits," President Clinton said in a written statement.
Cohen said the message service members should get from the
compensation package is that DoD has heard their concerns
and will act on them.
We believe this package will be fair
and effective,” Cohen said. “We must compensate men and
women in uniform properly in relation to their peers and in
relation to the larger economy.”
American Forces Press Service
